Exchange will go out of business if every Bitcoin is hold in private wallet

[Zanab247]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Storing Bitcoin and cryptos in a private wallet is definitely the best , with that you know that you're in total control of your funds and have rest of mind because not your keys not your cryptos. Then I dont think it's gonna that possible to entirely do away with centralized exchanges because they are the medium of exchange in this crypto world where people come together to transact, but what could happen with this current situation is that,  in the process of more exchanges going bankruptcy it will definitely separate the bad and good ones and we could start seeing massive lay off in the future as a result this.

Yes, you're in control of your Bitcoin and cryptos in your wallet, which it will be difficult for anyone to have access to your wallet without your approval. And you can have access to your wallet as many times you want and your coins is safe and secured in your wallet at the moment without giving your personal details to anybody in the community. Since the price of Bitcoin is too low in the market, it will be favourable to you, if you can leave your coins now in your wallet and wait for the price to go higher in the market before you can sell to make a good profits.

[BlackHatCoiner]

But, that's not gonna happen, so I see no point in discussing about it.

If people moved all coins out of exchanges, then Bitcoin liquidity would immensely suffer, because every trade on exchange would require two on-chain transactions. That would be a disaster.

Decentralized exchanges (which are the ones you might refer to) do, indeed, require more on-chain transactions than centralized exchanges, but I don't see how's that related to liquidity. As long as there are makers and takers, there will be liquidity, and that's regardless of whether those groups keep it in their private wallet or have a third parties do it for them.

[Franctoshi]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

I don't think Is gonna possible and happen as you think , we have traders and we have investors people come to exchanges to buy and sell their Bitcoin for several reasons. Exchanges are just like brokers or Banks you can decide to put your money in the bank or decide to keep it in your house but due to the risk involved in keeping it a home many now choose to put it the bank , So same is like the exchanges the risk involved with keeping your Bitcoin in an exchange is bankruptcy and hacks.
However I don't think that there's gonna be a time like that where they all gonna go out of business because people now keep their wallets , So there's always gonna be need for their services and only few will go out of business.

[2stout]

Yeah, but this is a hypothetical that won't happen.  As much as most abhor CeFi, there will always be a place for it in terms of newbies, arbitrage, and establishing markets which in turn helps establish value, liquidity, and adoption.

[Findingnemo]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Imagine cryptocurrencies took over the complete monetary system of this world then still these exchanges will exist because for people to make crypto to crypto conversion in the p2p level is not really convenient when it comes to large funds involved so exchanges will keep making money but the one thing is exchanges are for trading one to another not really meant for the storage purpose even if you are going to take an off from trading activities then it is really important to move the funds stored in exchanges to your actual wallet.

[Wiwo]

Exchanges despite being an unsecured way to store your assets still house millions of coins and billions of wallets put together and that's a significant number, saying exchange will go out of business is same as you saying we are closing the door to cryptocurrency trading because exchanges still serve as the major known way to exchange one crypto to another. Even though Satoshi has p2p in mind as mode of trading bitcoin, we should also know that p2p is kind of hard this day, since some countries already declare cryptocurrency illegal so p2p is not publicly encouraged and users have to move to exchange to transact with other users.

[tjtonmoy]

Some days back, i got hacked on my wallet (trust wallet). Then I transferred my funds in other wallet and also, half to the binance exchange. After reading this, somehow I don't feel safe now to hold those funds in my exchange account. Gotta get myself a hardware wallet.

[pawanjain]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Yes ofcourse that is true but even if all bitcoins are stored on non-custodial wallets it still doesn't mean that exchanges will go out of business.
Remember, there are altcoins as well which holds around 60% of the marketcap. Even if 50% of them are on exchanges then it is still a huge amount to be handled by the exchanges.
So exchanges are here to stay. Besides that, there are traders who actively trade on exchanges so liquidity will definitely be on the exchanges.

[justdimin]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Why even bother to post, what do you think you're sharing with the Bitcoin community that we don't already know? Maybe such "wisdom" might be reserved for the newbie section but you can already find dozens of similar recitations over the last few pages of threads in here. Maybe if you gave a few examples of recently failed crypto exchanges then it might emphasize the fact to people but frankly the average user of Bitcoin just wants simplicity and a reasonable level of security. Not everyone is technically literate and if we want Bitcoin to have the widest adoption possible we need to embrace the fact that many people want an easy to access online service similar to existing platforms like Paypal.

This is a forum and everyone has a right to share their thoughts, that’s why we are all here. It means, if 100 people say the same thing on a topic, the 101th could say the same thing showing support to the other 100 people as well. It may not be a new thing, but it does show the support for the old thing that has been posted already.

I am not saying that it is not annoying, you could find it annoying and I get that, there is no problem with that. However, people here do not have a duty to make sure that you are not annoyed by reading the same thing, it is not their job, they can write whatever they want as long as it is allowed by the forum rules.

[TribalBob]

bitcoin is stored in a personal wallet, I think it is a must for every owner of bitcoin and other altcoins if the amount is large, but if it's only 10-100$ I think it's still safe to store on the exchange, and I don't think the exchange will go out of business if the trading volume still being done, because there are a lot of transactions on each exchange not just bitcoins (just my opinion)

[BobK71]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Placing your assets in any exchange means that you are depositing your assets with someone else. If you face any type of security problem then of course you can keep that asset in your personal wallet but I think if the asset is not a big amount then there will be no problem. You can keep it in any popular exchange.

[TheUltraElite]

Bitcoin is already winning the war against the centralization of Bitcoin services, and a lot of Bitcoin holders are beginning to realize the safety of their Bitcoin when it is off the exchange and kept in a private wallet. You only send real Bitcoin when you do it on a p2p level and you don't own Bitcoin when your coins are stored on an exchange all you have is just promises and not Bitcoin if your Bitcoin is on the third party exchange.

Okay, but how does that affect what you wrote in the title?

Exchanges dont thrive on the money kept on their hot wallets, but from the fees taken from the users and also from the margin and leverages. So your title makes no sense in this regard.

People in this forum though understand this concept but you have to realize that the number of users in this forum is only a small part of the total userbase served by an specific exchange.

Now if you are idea is that exchanges thrive because they "exit scam" their users, then I would disagree and ask you to get a life.

[JayTrain]

this is the golden rule of any trader holding bitcoin, because there is an exchange today, and tomorrow they can hack or even better "hide behind the horizon" the best way is to keep bitcoin on a short leash, namely on your personal or hardware wallet, where people you don't know will not be able to dictate storage conditions to you, etc.

[Captain Corporate]

The idea is that there must be bunch of exchanges that hold a certain amount of bitcoin, but say they are holding more. Meaning, if every single person withdrew, then they wouldn't have enough, multiply that with bunch of other altcoins as well and you got yourself a big trouble. We had something like that back in Turkey, there was a place that offered basically free coins (rewards for doing stuff) and I think it was either doge or something similar, it supposed to be rewards. They put that in peoples accounts, those people traded etc etc and in the end they didn't had any coins to give, and the price of it went super high. This resulted with them just running away from the nation and leaving everyone hanging.

[Artem Sereda]

Exchanges earn on trading, not storage. In theory, if everyone keeps a minimum of coins, the exchange will not be able to offer a-booking merging trading services, but in practice, they will still have a reserve for this.

[Wiwo]

Yeah, but this is a hypothetical that won't happen.  As much as most abhor CeFi, there will always be a place for it in terms of newbies, arbitrage, and establishing markets which in turn helps establish value, liquidity, and adoption.

You have a point and I hope the ops will look I to that direction and come to a conclusion that Bitcoin can not witness the adoption we glamour for if it doesn't have to go through exchanges, we can not underestimate the place of exchange for crypto access, the exchange has made access to Bitcoin fast and easy even in a restricted region exchange allow Bitcoin p2p trading which allows newbies have direct access to the bitcoin market. Exchanges may have hard their bad influence on the cryptocurrency industry most especially the centralized exchange who has been nothing but tools in the hands of regulators and CEOs who act unilateral against the customer's will and have 100% control over the balance on the exchange.

[AmoreJaz]

Exchanges earn on trading, not storage. In theory, if everyone keeps a minimum of coins, the exchange will not be able to offer a-booking merging trading services, but in practice, they will still have a reserve for this.

exactly! and people always need to do their trading because for various reasons such as earn profit, need for another alt, converting their crypto to their fiat, avail other financial services such as staking, flexible savings and others. so yes, exchanges are not here for storage purposes. this is why it will continue to exist just like the regular forex stations.

[ilovealtcoins]

Bitcoins are held in the wallet and all do nothing but hold in the wallet then bitcoins will become garbage, this is a silly idea. The market exists because of transactions, thanks to transactions that solve supply and demand, thereby promoting bitcoin development. If people try to buy bitcoin and throw it in their wallet and there is no transaction in the market, where is the market going and what is the purpose of holding bitcoin as it is just to see.

[OcTradism]

You have a point and I hope the ops will look I to that direction and come to a conclusion that Bitcoin can not witness the adoption we glamour for if it doesn't have to go through exchanges, we can not underestimate the place of exchange for crypto access

People have many choices to trade bitcoins with centralized exchanges, decentralized exchanges and peer-to-peer trading platforms.

Because we don't trade bitcoin daily or trade it too more often and there are hodlers who will let their bitcoins intact for a while some time. It is important to have good bitcoin wallets to store our bitcoins.

the exchange has made access to Bitcoin fast and easy even in a restricted region exchange allow Bitcoin p2p trading which allows newbies have direct access to the bitcoin market.

Peer to peer trading can give us more freedom but it contains more risk, more chance to fall in scam trading so knowledge and experience to choose good trade partners to trade with is very important.

Exchanges may have hard their bad influence on the cryptocurrency industry most especially the centralized exchange who has been nothing but tools in the hands of regulators and CEOs who act unilateral against the customer's will and have 100% control over the balance on the exchange.

Governments do their jobs by keep most of things in their control but I disagree to say centralized exchanges are tools of regulators and governments. Before stricter regulations on cryptocurrency market, we don't have enough evidence to make this conclusion.

[Tony116]

Exchanges may have hard their bad influence on the cryptocurrency industry most especially the centralized exchange who has been nothing but tools in the hands of regulators and CEOs who act unilateral against the customer's will and have 100% control over the balance on the exchange.

Governments do their jobs by keep most of things in their control but I disagree to say centralized exchanges are tools of regulators and governments. Before stricter regulations on cryptocurrency market, we don't have enough evidence to make this conclusion.

I also disagree with the idea that exchanges have a bad influence on the crypto industry. We cannot deny that centralized exchanges have made a great contribution to helping users to access the market easily, they provide us with a lot of necessary services in the market. I firmly believe that most of the new investors entering the market come through centralized exchanges which are an easy place to start for newbies if they want to get bitcoins quickly and securely.

Maybe bitcoin holders don't need an exchange, but the crypto market certainly does, and exchanges are an important part of the market.